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13 January 2020
hungary austria

cee overview - regulatory

Status quo and what's to come

The increase in regulation of our economic and private life does not stop when crossing the borders to Central and Eastern Europe.

It hits the CEE region the same way as Western Europe. This is especially true for industries which are regulated at the EU level, such as energy, telecommunications, public transport and infrastructure. But it is also true for legal areas that are relevant to everyone, such as the new privacy regime under the GDPR, which is slowly but surely replacing the rather weak national data protection systems in CEE. Finally, regulation in CEE is driven by emerging and increasingly pressing global topics and concerns, such as climate change. The global fight against climate change in turn has far-reaching effects on the environmental legislation. In this context, our Regulatory Practice Group in CEE focuses strongly on energy, environment, GDPR & privacy, telecommunications and public procurement matters.                

Energy & climate change
The generation and consumption of energy is the largest source of global greenhouse-gas emissions. At the same time energy demand is increasing globally and this trend is set to continue, driven primarily by economic growth and the rising population. Incentivising investment in low-carbon technologies is a key challenge for governments and regulators to achieve carbon reduction targets, especially in CEE, where carbon still dominates the energy markets. Investment in renewable energy will therefore continue to be the key for transitioning to non-carbon energy generation. Many CEE countries are about to establish new renewable promotion schemes, most based on auctions aimed at procuring new renewable capacities in a competitive way. Schoenherr's energy practice has long-term experience in advising on renewables, including projects, auction design and RES contracts drafting.       

Climate change, waste and pollution prevention have become a matter of priority in CEE. The improvement of environmental standards is mainly driven by EU legislation, such as the EIA Directive, BAT-documents under the IED Directive, the Seveso III Directive, the Waste Directive and new case law under the Water Framework Directive. The implementation of EU legislation into national law is becoming increasingly challenging. Our environmental experts in CEE support clients and national governments with the undertaking to ensure compliance with EU environmental standards.   

GDPR & privacy 
We are in the second year of the effectiveness of the GDPR and higher fines are becoming common all over Europe, and not just in the Western parts. Significant fines were also imposed in the CEE region within the last two years, indicating that data protection is now taken more seriously than ever, not only by the regulatory authorities, but also by the individuals who are the key drivers of enforcement through initiating complaints before the national data protection authorities as well as civil court claims. This development impacts all industries. The declared objective of the GDPR was to harmonise the data privacy framework within the EU Member States. Although the GDPR is doubtlessly a major step towards achieving this goal, Europe is still far away from a harmonised privacy law, not to mention that the more diversified case law becomes on the Member State level and the more regulators exploit the range of fines under the GDPR in a non-synchronous manner, the more Europe will drift away from harmonisation. In other words, GDPR enforcement will be a high priority in the upcoming years. We will therefore continuously focus on GDPR enforcement in our CEE practice.

What does driving have to do with telecommunications? What about grocery shopping? A few years ago you probably would have said "nothing". But as we approach the third decade of the 21st century, we must reconsider. Autonomous driving, smart domestic appliances and all other machine-to-machine communications require network stability and larger than ever data streaming capacities. Thus, the grid expansion to 5G networks is omnipresent. The legal implications started with frequency auctions and will continue with "classic" topics such as expropriations and easement agreements. It will also include setting up joint ventures for know-how bundling projects and will compel us to deal with upcoming new or adapted regulations which will reflect the ever-changing demands of the digitalised world. 

Public procurement
One of the main goals of the new public procurement directives (Directives 2014/23/EU, 2014/24/EU and 2014/25/EU) has been the mandatory implementation of e-procurement and the subsequent digitalisation of the procurement process to increase efficiency and foster cross-border participation. Mandatory e-procurement (including mandatory e-invoicing) has already left its mark in the CEE public procurement world. Member States have implemented various measures to implement electronic communication throughout the complete public procurement procedure, starting with e-publication of contract notices, the e-availability of tender documentation, the e-submission until the e-communication with all bidders. While the digitalisation of the procurement process is still in its infancy, some Member States are already one step ahead by having established public open-access government databases and contract registers. Further digitalisation steps, such as e-evaluation of tenders by applying transparent algorithms, automated procurement of basic products or the utilisation of blockchain technologies and smart contracts are no longer a vision of the future.



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